Store wars

September 23, 1992

Attention, shoppers. The Baltimore-area supermarket scene, already described by industry observers as "over-stored," is expanding again. The new Eddie's of Roland Park opened yesterday in the Baltimore County community of Woodbrook, and Super Rite Corp. of Harrisburg, Pa., has revealed plans to launch a string of local supermarkets in a splashy concept billed as "theater of food."

The urge among retailers to open food stores is easy to understand in light of studies showing Americans are spending about four times as much on food as on other retail items. Where the bucks are, then, is where a surging number of retailers are headed, including discount "club" stores like Pace and BJ's and retail behemoths like Wal-mart.

This trend, like so many others nowadays, is being played out against the background of the recession. In hard times, money that might have gone into a new stereo or television instead goes into the food budget. People on tight incomes are especially on the alert for bargains. That's why most food retailers are shifting toward low-overhead operations that stress values over solicitous treatment. (It's also why the Eddie's and Super Rite projects, targeting patrons who won't mind paying extra for service, are seen as anomalies.) Even Giant Food, the dominant supermarket chain in Maryland, has supplemented its service-oriented approach in recent years with bargain bulk items similar to those found at the club stores.

Giant will need to continue making such adjustments as its competitors try to muscle in on its turf. But the company might be hindered by having a unionized staff whose salaries and benefits are twice what workers at non-union supermarkets earn. It's no coincidence that the fastest-growing chains are not unionized; with lower payrolls, they can sell at lower prices.

According to a study commissioned by the Food Marketing Institute, large metropolitan areas like Baltimore can expect to see even more discount food and drug stores in the coming years. To stay competitive, supermarket chains will have to keep diversifying their inventories and offering deeper discounts. Some retailers are going to fall in this struggle, most likely small independents. The good news for grocery shoppers is that they can only win in a protracted battle of the bargains.